Kentucky Sales & Use Tax

The Kentucky Quarter Horse Association recommends you contact
professional tax or legal advisors if you have specific
questions.

General Guidance

KRS 139.531 provides
the basis for the application of tax to "fees for breeding
a stallion to a mare in this state". KRS
139.050 provides definitions of gross receipts
for sales tax purposes.

1) The fees paid for breeding a stallion to a mare that
occurs in Kentucky are subject to the 6% sales tax. A breeding
that occurs out of state is not subject to the Kentucky
sales tax. If a seller contracts to sell semen for use in
the artificial insemination of a mare located in Kentucky,
then the Kentucky sales tax applies. If a mare owner takes
possession of semen in Kentucky for artificial insemination,
then Kentucky sales tax applies.

2) If a stallion owner donates a season or stud fee to
a charity for auction, the auctioneer or charity that receives
receipts from the sale of the breeding season is subject
to the Kentucky sales tax. Included in the amount subject
to sales tax are any services that are part of the sale,
such as chute fees which are related to the collection of
the stallion.

3) The stallion owner that receives receipts from the breeding
of a stallion to a mare in this state is responsible for
the tax. A stallion manager may remit the sales tax due
on behalf of the stallion owners per agreement. However,
if additional tax is determined to be due from a breeding
transaction, the stallion owner is the responsible party.

4) If a stallion owner breeds his own mare to his stallion,
there are no receipts paid and no taxable transaction occurs.